Pin header, female header, board to board connector as an indispensable part of products and equipment, in many product applications in the procurement proportion has exceeded 8% of the total procurement cost. And compared with other key devices:
1. The threat of new entrants
Pin, pin, pin, board to board connector as an indispensable part of products and equipment, in many product applications in the procurement proportion has exceeded 8% of the total procurement cost. And compared with other key components, connector products have a wider range of choices and more space for local procurement, so its industry entry barrier is not high. The barriers to entry mainly exist in product difference advantage and scale economy, while there are no special requirements in sales channel, capital demand, conversion cost and cost advantage. However, the vitality of the connector market and the high growth potential in communications in the railway, energy industry, machinery industry and so on are attracting more and more new entrants.
2. The threat of substitutes
The main alternative to connectors is terminal blocks. Is in the middle and high-end market, the connector is not threatened by substitutes, which is mainly the connector itself is developed from wiring terminals, is to facilitate the cable, fast insertion and removal without error. In the middle and low end of the market, connectors are more threatened by substitutes, and when buyers are under cost pressure, they will choose mediocre quality, cheap terminals.
3. Bargaining power of buyers
The buyers of connectors are product and equipment manufacturers, and the concentration of buyers is high: the proportion of products purchased by the buyers from the industry is about 10% of their total cost; The degree of standardization of buyers' purchasing from the industry is improving: buyers' profitability tends to decrease; Buyers have the ability to carry out backward integration; More transparent information on both sides; So all this makes the bargaining power of the buyer higher and higher.
4. Bargaining power of suppliers
Connector suppliers are aluminum, copper, silver, gold and other suppliers; Engineering plastics and other raw materials supplier. The concentration and standardization of seller industry are high; There's a lot of buying going on; Product differentiation degree is very small; The cost of switching sellers is relatively small; Forward integration is unlikely; Information on both sides is fairly transparent; In general, the bargaining power of the seller is relatively low, and the existing enterprises can still maintain a considerable profit space between the buyer and the seller.
